(Image courtesy of SolarWorld.)
Chinese manufacturing is paradoxical.
Pick up any random manufactured object and you’ll most likely find that it was made in China. Yet despite—or perhaps because of—the prolific nature of Chinese manufacturing, many Chinese industries are viewed with suspicion, if not outright hostility.
Steel is the best example. Last year, US stainless steel producers filed antidumping and countervailing duty petitions against Chinese imports. The global glut of Chinese steel has also been cited as the cause of significant layoffs the US steel industry. In fact, China has produced so much excess steel that President Trump could use it to make enough rebar for 3,527 walls spanning the US-Mexico border.
The steel industry is a venerable US institution, but even relatively nascent industries are reportedly feeling the effects of China’s trade policies.
According to a recent statement from SolarWorld, one of the largest US crystalline-silicon solar manufacturers, “China’s trade aggression in the solar sector is a textbook example of how the country—employing an arsenal of price dumping, massive subsidization, cyber-espionage and closed markets—has used unfair trade as a battering ram to try to wipe out a US industry and its employment.”
As with steel, the issue—according to the company—is that Chinese solar prices are below the cost of US production. SolarWorld has also stated that China’s state-financed overcapacities triple domestic demand, and would be enough to supply the global market for solar products 1.3 times over.
“China’s continued violation of international trade laws must be addressed,” said Juergen Stein, US president of SolarWorld. “We have used all legal means available to us since 2011 to right these wrongs. For the sake of the solar industry in the West, it is now time for stiffer, more concerted action.”
“The US and European markets are the industry’s seats of innovation,” Stein continued. “To see them undermined as a matter of policy by a foreign, nonmarket government is unacceptable. It’s too late for thousands of jobs that have been lost. But it’s not too late for this industry to return to creating breakthroughs and jobs.”
Stanford Study Calls for US Solar Policy Reform
Interestingly, a recent study from Stanford University’s Steyer-Taylor Center for Energy Policy and Finance concluded that China and the United States should work more closely together, with each country capitalizing on its particular strengths.
"China's solar industry and market is grossly misunderstood in the West," said scholar-in-residence, Jeffery Ball. "The goal for the United States should not be to beat China. It should be to play to the US’ comparative advantages—to craft policies to reduce the cost of solar power for the benefit of the world and, in the process, for the benefit of the US."
For example, the researchers suggested that the federal government should revise a policy which requires those who accept US federal funding for solar R&D to promise to manufacture the resulting technologies "substantially" in the US.
Although this policy was created in an effort to bolster US solar manufacturing jobs, the researchers found that it may instead diminish the quality of federally funded solar research. Ultimately, they argued that solar R&D has a greater long-term economic value to the US than solar manufacturing.
SolarWorld would presumably disagree.
What do you think? Can the US compete with Chinese solar manufacturing, or is cooperation the better path forward? Comment below.